The stock plunged 34 percent, the biggest drop since October 2008, to 16 rupees at the close in Mumbai. Suzlon’s founders sold the shares, which account for 6.19 percent of the company, to raise 2.4 billion rupees ($44 million) to repay lenders as part of a debt-recast plan, according to an e-mailed statement from the Pune-based turbine maker today.
Suzlon completed refinancing $1.8 billion in domestic debt last month after failing to pay $209 million of foreign-currency convertible notes on Oct. 11. That was India’s biggest convertible-bond default and fanned concerns that creditors may demand immediate payment of other loans.
“Founders selling their stake in the company to raise funds for repaying debt shows their desperation,” said Sudip Bandyopadhyay, chief executive officer at Mumbai-based Destimoney Securities Pvt.
The founders sold shares to support the company’s debt restructuring plan, Chief Financial Officer Kirti Vagadia said in a phone interview today. Shares freed up after paying bondholders will be pledged to existing lenders to support the debt restructuring, he said.
The company’s founders have no plans to sell more shares in the market, Vagadia said.
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